Unconventional wisdom on global political economy.
Anyone else a tad concerned about the authority both parties are ascribing to America's top military brass in this election season? Isn't the hallmark of our democratic system that the military keep their butts out of the political process and let the people decide? This--and the Democrats' national security tunnel vision at the convention--is a worrisome precedent.
Niall Fergusson is a good historian. It's his prescription for the future which is objectonable. I've been sifting through his latest work, Colossus: The Price of American Empire, for the last few days (which is why I haven't been posting much). Rather than overwhelm you with an unending post, I am linking to a Word document where you can read my more detailed thoughts.
The bottom line is this. Ferguson argues that the United States is by all means an Empire, even if no one wants to admit it. It always has aspired to be one, and has acted like one for a long time (remember the Monroe Doctrine?). This imperial impetus has pursued a dual interest of securing military power (and the strategic positions necessary for thus) and the underwriting of American capital's interests in foreign lands. Then comes George W. Bush and the second Iraq war, and Ferguson forgets all this, accepting Bush's prima facie rationale for Invading Iraq (anyone who wants to go deeper than official White House rhetoric should check out part II of Peter Gowan's book, Global Gamble, although part I is also excellent). Ferguson loses all grip with reality, and calls for a renewed and explicit commitment to American Empire modeled along a self-deluded nostalgia for the British Empire. Too bad. You had me for the first 150 pages or so.
Read more here.
In fact, Stephen Roach is a Wall Street shill, which means he is more interested in knowing the reality of underlying economic conditions so his employer can make gobs of money than he is in assigning blame for political reasons. Nonetheless, he ain't afraid to tell it straight about how crappy the economy has performed under Bush. In this morning's NYT:
More than a million jobs have been added to total nonfarm payrolls over the past four months, the sharpest increase since early 2000.
These gains certainly compare favorably with the net loss of 594,000 jobs in the first 27 months of this recovery. But there's little cause for celebration: the increases barely make a dent in the weakest hiring cycle in modern history. From the trough of the last recession in November 2001 through last month, private sector payrolls have risen a paltry 0.2 percent. This stands in contrast to the nearly 7.5 percent increase recorded, on average, over the comparable 31-month interval of the six preceding recoveries.
Nor is there much reason to celebrate the type of jobs that have been created over the past four months. In general, they have been at the lower end of the economic spectrum.
...Desperate to maintain lifestyles, [American families] have turned to far riskier sources of support. Reliance on tax cuts has led to record budget deficits, and borrowing against homes has led to record household debt. These trends are dangerous and unsustainable, and they pose a serious risk to economic recovery.
We hear repeatedly that the employment disconnect is all about productivity - that America needs to hire fewer workers because the ones already working are more efficient. This may well be true, but there is a more compelling explanation: global labor arbitrage.
It was only a matter of time before the globalization of work affected the United States labor market. The character and quality of American job creation is changing before our very eyes. Which poses the most important question of all: what are we going to do about it?
For starters, how about throwing Bush out of office? There may be no easy answers to this challenge, but at least in Kerry we get someone who recognizes it as a problem, and a serious one at that.
If you're like me, this is what passes for summer beach reading.
I've added some new titles to my Amazon reading list: Beyond Economic Globalization.
One time while searching for books there I stumbled across a list compiled by Dan Griswold of Cato. So as not to be out done, I cobbled together my own globalization reading list to push back against Cato's ploy for ideological hegemony at Amazon.
Admittedly, most works on economic globalization devolve to hackneyed "free trade good/bad" polemics and fail to puncture the surface of the deep seated social, political and economic change spawned by globalization. Arguing about what trade does to per capita incomes only takes you so far and tends to obscure deep understanding of how (and for whom) the world really works. Hence, Beyond Economic Globalization.
Be sure to visit and rate my list so that when people search for globalization-related items at Amazon, they come across my list instead of theirs. Culture war? Bring it on!
Despite the WTO's and the US's strong arm tactics, the Doha Round of trade negotiations is still going nowhere.
Supachai Panitchpakdi, the still neophyte Director General of the WTO is rattling sabers in the FT this morning:
"The future of the DDA [Doha Development Agenda], where agreement can help lift living standards around the world, will be determined by what we do here in the next two weeks."
Not exactly. Even the most rose tinted analyses point to slim to no benefits from the Doha Round. The World Bank predicts that, e.g., Sierra Leone's per capita GDP would blossom to a whopping $592 by 2015 thanks to the Doha Round. Oh, but without Doha, it would be $583 in 2015. All this fuss for $9 each? Hell, the rich countries and the WTO could just give $9 to every Sierra Leonian rather than spending all this money shipping trade ministers around the world to convene in luxurious ballrooms and stay in five star hotel suites.
Many provisions of the Doha Round that the developed countries are pushing, say a provision for developing countries to concede to rich country technological monopolies, would actually lower incomes in the global South.
George Bush's foreign policy is in tatters. Democrats are pointing this out, and they’re right to. But can they go beyond criticizing Bush? Can they articulate a coherent alternative to his policies?
...We are now at a tipping point...we are going to be endlessly trying to "cope" with the problems that are increasingly difficult to cope with--to "manage" situations that become inherently less manageable.
Okay, you caught me. This is actually more straight-shooting from the good folks at PNAC, Spetmeber 7, 1998. I just substituted Bush for Clinton.
Here's a blast from the past--Robert Kagan and Bill Kristol, writing in the pages of the Weekly Standard:
Unfortunately, the Bush administration so far shows little sign of reversing Clinton’s feckless approach to Iraq...President Bush, in his public statements, has not even hinted at a desire to remove Saddam. -- March 12, 2001
Just what we needed: a lengthy Congressional investigation at the taxpayers' expense to tell us what we already know: the homeland security terrorist threat warning system is code stupid.
Buried at the end of a WSJ article this morning, we learn that even though the US has an average (trade-weighted) tariff of a paltry 3.9% (less than the sales tax in most states), companies exporting to the US bilked the Customs Service for some $130 million last year. $103 million of those uncollected duties were for products imported from China. That's a nice tax incentive for companies who opt to produce in China rather than the US.
People For the American Way, or PFAW as I like to call them, are hosting a poll on their home page for your favorite progressive website. Since Globalize This! ain't on there, feel free to vote with your (bleeding) heart.
Didn't see it coming, did you Professor?
Apparently regional economic integration efforts in Asia have been around for some time. On July 30, 1969, the governments of Fiji, India, Indonesia, Kiribati, Malaysia, Micronesia, Papua New Guinea, Philippines, Samoa, Solomon Islands, Sri Lanka, Thailand, Vanuatu, and Vietnam launched the Asian and Pacific Coconut Community in an effort to foster better production, better processing, better marketing, and coordinated research to acheive dynamic growth in the coconut industry.
In addition to institutionalizing cooperation on coconut policy and sharing coconut technology, the APCC puts out such best selling publications as the bi-monthly newsletter COCOMUNITY and the annual Coconut Statistical Yearbook. The 2004 convention is going on RIGHT NOW in Vanuatu.
Asia exported $36.7 million in coconuts in 2002, or a little over half of world coconut exports, according to the FAO.
Robert Keohane writes in this morning's FT:
Sir, Though the US has formally handed over nominal sovereignty to the interim Iraqi government, the American invasion of Iraq has not attained most of the objectives sought by its proponents. Significant quantities of weapons of mass destruction have not been found. Saddam Hussein has been captured, but there is no assurance that his supporters will be excluded from future power. Politically, the best that can be hoped for is a set of pacts among influential leaders of various factions in Iraq, many of whom have armed militias to enforce their will on civilians. Democracy remains a distant dream, while civil war becomes a present reality.
Failure is painful, but we can learn from it. We should draw seven lessons from the US experience in Iraq, and remember them in the next crisis. 1. Base policy on analysis, not fixed beliefs. The president and the Pentagon believed Saddam was a threat to the US and the transition to a democratic and pro-American Iraqi government would be easy. Troop numbers could therefore be low, and few preparations had to be made for the aftermath of the anticipated military victory. 2. Always have a Plan B. The State Department prepared a much more realistic assessment of the problems that would face the US in the aftermath. Secretary of defence Donald Rumsfeld not only rejected the plan, he sought to prevent anyone associated with it from being involved in postwar planning for Iraq. 3. Remember that military power is not sufficient to achieve most political objectives. The fact that the US has overwhelming military power enables us to win wars. It does not assure we will win the peace. To achieve political objectives, it is essential to be able to persuade people that our values and interests are consistent with theirs. 4. The first principle of foreign policy is to match goals with resources. About 90 per cent of available American military units are reported to be committed to Iraq. The Nato commander in Afghanistan has complained that he has too few resources to act effectively outside Kabul, the capital. The key goal of US foreign policy - to fight terrorism - has been undermined by the attack on Iraq. 5. Occupations usually generate mobilised opposition. It does not matter who the occupier is. The US in Vietnam, the Soviet Union in Afghanistan, Israel in the West Bank and Russia in Chechnya have had the same experience. Whatever the motivation, and despite overwhelming military power, people resist occupying forces. 6. War is dangerous for democracy. This administration has claimed virtually unlimited authority to arrest and prosecute, without normal guarantees of due process, anyone it accuses of involvement with terrorism, inside or outside the US. "Eternal vigilance is the price of liberty", and is especially needed in wartime. 7. Dismissing international law is detrimental to our capacity to lead. The prisoner abuse scandals were pervasive, not isolated, incidents. They were made possible by a climate of disregard for international law, which was clearly fostered by the president, vice-president and secretary of defence. Nothing has done more to discredit the US as a leader, even in the eyes of our usual friends.
More generally, we should remember how misleading, indeed deceptive, have been the claims made by the US government about Iraq over the past two years. As a free people, we need to be wary of what our government tells us, even - or especially - in time of war. It is crucial for us to support vigorous investigative journalism, even when it makes us uncomfortable.
We Americans rightly seek to extend the benefits of freedom and democracy to others, although we are often naive about how to do so. But maintaining a vigorous democracy requires continuous activity by citizens. As members of the public, we must think and talk about policy and public affairs. We should be trying to figure out for ourselves the lessons of Iraq, and we should be discussing them with families and friends. Only then will we be ready, as a free people, for the next crisis.
(Emphasis added)
The US economy, excluding farmers and fighters, added an anemic 112,000 jobs in June--short of the 150-200,000 needed just to keep pace with population growth, and well short of a pace that would entice back into the labor force the 2.4 million some people who have in frustration given up looking for work.
Particularly troubling, manufacturing employment fell after posting gains in the previous four months which reversed four years of hemorrhaging manufacturing jobs.
To go on public record and to highlight what might otherwise be swept under the carpet by the business press, tepid job growth in June is not the only worrisome point in today's employment situation release. The Department of Labor also revised downward job growth in the previous two months, setting total employment back by another 35,000 jobs--not a heck of a lot, but not as strong as was thought. Still, the 112,000 jobs figure marks growth from a smaller base.
Now that Fed Chairman Alan "Captain Ahab" Greenspan has reached his limit of expansionary monetary policy and fanatically chasing his white whale (i.e. inflation), and considering that Bush already blew his wad as far as expansionary fiscal policy is concerned, it looks like the labor market is in for some dark days ahead.
Uncle Brucie takes a break from the paragon of journalistic integrity known as the Washington Times, to moonlight in this morning's New York Times:
After the Republicans won control of Congress in 1994, we all dreamed of the paradise that would be ours if we could just get a Republican in the White House. We could fix the budget and the tax system, rein in the bureaucracy, neuter the trade unions and trial lawyers, and do all those other things that could never be done because Democrats were always blocking the way.
Four and a half out of five ain't bad. No one can deny they have acheived a lot in four years.
